Cliff Notes

2020

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Last updated: July 14, 2018 by Savanah

The state lottery generated $5.077 billion in sales for the 2017 fiscal year; an all-time record. State Representative Joe Deshotel filed a bill (HB 2741) last March which would allow up to nine commercial casinos in Texas; the state currently does not allow such casinos. Gambling on historical races are no longer allowed per a vote by the Texas Racing Commission. Texas Attorney General, Ken Paxton, declared in 2016 that online daily fantasy sports (DFS) betting is illegal in his state. However, a number of bills have been introduced since which would legalize DFS if passed. Representative Joe Barton has floated bills nationally legalizing online poker, but the combative stance on DFS from the AG isn’t helping future online poker and/or casino game regulation in the Lone Star State.

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Under current laws, it is not legal to operate a poker online business in the State of Texas. No licensing body has been set up in the Lone Star state and there are no talks of seeking compacts with licensed states to offer online poker to residents. A number of measures are pending which may, in the future, introduce online poker to Texas on a state and/or federal level. Studies show that Texas poker players are taking their gambling to offshore poker rooms which is legal to do so.

The following graph tracks our expected legislation of online poker in Texas on a state law level. It is currently already legal on a Federal level. This graph monitors the current rise or fall of expected legalization.

Recent Activity
With 27 million residents, many of them avid gamblers it would seem that Texas has fertile ground to grow a successful online poker industry. However, Texas is considered a conservative bastion with strong anti-gambling factions, who continue to rally together to block the advancement of gambling laws.

A joint resolution, consisting of the State of Texas Ballot Measure SJR No. 43[A] and State Bill No. 1103[B], which was introduced by Senator Leticia van de Putte in March 2013. The measure needed to be approved by the Senate and the House, which it wasn’t, and proposes a constitutional amendment to allow for federally regulated online poker. The measure allowed for a Texas constitutional amendment which could allow for the state to opt-in if and when federal licensing becomes a reality for online poker in the United States. The measure is not exclusive to Texas and would essentially allow any state to apply the federal law if it becomes a reality.

Rep. Eddie Rodriguez, D-Austin, one of the most active lawmakers in favor of poker legislation in the state has been quoted as saying in the Star Telegram: “We make criminals out of poker players, and we don’t have to. The rest of the country is catching up to this idea. I hope Texas will follow suit.”

Another bill still being pushed, albeit on a purely federal level, is by US Rep. Joe Barton of Texas who continues his years-long efforts to legalize the game online. Barton’s Poker Freedom Act[C] was originally introduced in July 2013, and pretty much every year since, calling for the regulation of online poker at a federal level and not banning online casino games. While Barton says he will continue to monitor poker legislation in Texas, he also believes that without federal guidelines it would be difficult to regulate the game in the state. “I believe that ultimately there should be a national standard that accomplishes the goal of protecting the integrity of the game and the rights of those who play it,” he told the Star Telegram.

History of Gambling in Texas

1933

Parimutuel betting legalized as a way to raise revenue during the Great Depression.

1937

Betting banned at all tracks at a special legislative session called by Governor James Allred.

1948

A law requiring that gambling ships visit foreign ports or sail for at least 24 hours introduced.

1960

Virgil “Red” Berry, a professional gambler, elected to House of Representatives on pro-parimutuel platform.

1969

Lawmaker Virgil Berry proposed to split Texas in two, allowing for horse betting in the South. Nothing comes of the proposal.

Two bills were introduced to legalize and regulate poker over the internet in Texas, but failed to gain any traction.

2015

Barton re-introduces a bill to the U.S. Congress to legalize online poker across the country, but nothing advanced.

2017

The state lottery generated $5.077 billion in sales which was an all-time record.

Land Based Poker

The Texas Penal Code[D] section 47.2 stresses that it is illegal for a person to play and wager money or anything of value on any game where cards are used and this clearly refers to poker as well. Games where the house gets a percentage (including the costs of food or utilities) are illegal. The current laws governing land poker in Texas, however, allow for friendly poker games, where the pot goes to the players. Friendly poker games must be played in a private place, not within view of many people, and this is generally taken to mean a private home, although it is not defined in the law. The player may also not wager for money or anything of value.

Pending Land Poker Measures in Texas

There are a number of measures that continue to push for a change in poker laws in Texas, namely House Bill 292[E] and House Bill 2098[F].

HB 2098, also known as the Texas Social Gaming Act of 2013, was filed by Rep. Ryan Guillen (D-Rio Grande City) in February 2013 and seeks the legalization of social poker gaming, essentially allowing licensed gambling establishments to offer poker to ‘registered’ players. Profits would be collected through the sale of food and membership fees, but not by collecting a rake. This bill was not passed.

HB 292, or the Poker Gaming Act of 2013, introduced by Rep. Eddie Rodriguez in December 2012, calls for the provision of regulated poker gaming at licensed facilities such as bingo halls, licensed horse tracks and dog tracks and American Indian tribal lands. The act seeks to make live poker legal only, and not video poker or internet poker. The rules would be overseen by the Texas Lottery Commission, and an 18% tax from gross receipts would be paid by the facilities. This bill was also not passed.

Gambling Laws

Texan gambling law is governed by Section 47.01[G] where the meaning of a bet is defined as, “an agreement to win or lose something of value solely or partially by chance”.

The term ‘gambling’ is described in Section 47.02 as, “(a) A person commits an offense if he/she:
(1) makes a bet on the partial or final result of a game or contest or on the performance of a participant in a game or contest;
(2) makes a bet on the result of any political nomination, appointment, or election or on the degree of success of any nominee, appointee, or candidate; or
(3) plays and bets for money or other thing of value at any game played with cards, dice, balls, or any other gambling device.”

The law makes it a misdemeanor to make illegal bets in the state, although gambling for pure social purposes in a private place or if you take part in regulated gambling activities are allowed.

Summary

In summary, wagering is mainly done at pari-mutuel racing tracks such as the Lone Star Park, or at the Lucky Eagle Casino run by the Kickapoo tribe which claims to operate the ‘only legal live poker room’ in Texas.

Senate Joint Resolution 6 introduced by Sen. Rodney Ellis (D-Houston) and which proposes, “a constitutional amendment providing immediate additional revenue for the state budget by creating the Texas Gaming Commission, authorizing and regulating the operation of casino games and slot machines by a limited number of licensed operators and certain Indian tribes, and authorizing a limited state video lottery system to be operated at horse and greyhound racetracks and on Indian tribal lands.”

In addition, State Senator John Carona (R-Dallas) has proposed Senate Joint Resolution 64 which proposes, “constitutional amendment providing immediate additional revenue for the state budget by creating the Texas Gaming Commission, and authorizing and regulating the operation of casino games and slot machines by a limited number of licensed operators and certain Indian tribes.”

Casinos in Texas

At present, it is not legal to operate an establishment where bets are made or taken in Texas, which rules out casinos. The exception is the Native American casino which operates off tribal land, and which is the only establishment where live poker can be played outside of the home. There are no commercial casinos otherwise.

Racetracks in Texas

Wagering at racetracks is one of the only forms of legal gambling in the state, both at horse racing tracks and at dog races. At present, three dog tracks are allowed to operate in the state. Wagers placed need to be pari-mutuel and the legal betting age is 18. However, people of all ages are allowed to watch the races. Simultaneous broadcasts are legal at racetracks, allowing visitors to place bets on more races in a day.

In late 2015, the Texas Racing Commission declined to repeal a previous authorization of historical racing games. The move could mean that the entire horse racing industry in the state could shut down. The legislature, whose ruling was backed by a district judge, said the historical racing games are a backdoor expansion of gambling in the state. The game operates similar to a slot machine and uses past races for results. Players have no idea on the outcome of these races as fake names and locations are used. Texas may end up expanded gambling faster than some other states, but the heavy push back on stuff like this doesn’t help.

Boat Laws in Texas

Since offshore gambling is allowed in Texas, one way for residents of the state to enjoy gambling is to take legal gambling cruises which set off from the Texas coast and offer gambling once the boat enters the Gulf of Mexico. Similarly, bus tours will carry residents across the state border line to gamble in casinos in Nevada, Mississippi and Oklahoma.

Lotteries in Texas

Texas Lottery[H] is operated by the Texas government and offers drawing games and scratch card tickets. Launched in 1992, the lottery directs all proceeds to public causes such as education and health. Since the lottery inception, it has earned over $22 billion to state coffers.

Charitable Gambling

It is permissible to enter raffles or play bingo games which are conducted by qualified organizations in Texas, under the Charitable Raffle Enabling Act (CREA), Chapter 2002 of the Occupations Code[I].